Press Release – Reclaim Finance and Friends of the Earth France
Paris, 26th February 2021 – presenting its financial results for 2020, Engie today committed to give up its coal assets in Europe by 2025, and in the rest of the world by 2027 (1). Reclaim Finance and Friends of the Earth France have condemned a “non-announcement”, which “carefully avoids responding to the real question of the future of the French energy giant’s assets”. The NGOs call on Engie to explicitly commit to closing its coal power plants and to a just transition for all its workers throughout the world, and not to sell or convert its assets to other energy sources which are deadly for the climate
Engie is still today operating 10 coal plants spread out between Portugal, Morocco, Chile, Brazil and Peru, constituting a total of 4GW. Climate science is unanimous on the need to plan for the closure of all existing coal assets and to decarbonize the energy sector in the shortest time possible. If the coal exit dates announced by Engie are in line with the science, it spells bad news for the climate.
In fact, even if some assets might be closed, Engie is also planning on the sale and above all the conversion of its assets. In an interview on FranceInter last December, Claire Waysand, interim director-general and general secretary of Engie group, mentioned two conversion options: biomass or gas (2), and not renewable energies like solar which could provide a solution for plants in Chile and Brazil.
“In converting its coal power plants into gas or biomass, Engie is sending us out of the frying pan and into the fire. Biomass has an even worse impact on the climate than coal, and cutting down forests isn’t a bright idea when biodiversity is disappearing at an unprecedented rate. As for gas, it should be remembered that it is still a fossil fuel and that for plants in Chile and Brazil this could mean importing fracked gas from the US or Argentina. Engie’s shareholders must react without delay to prevent the company from sinking ever deeper into false solutions and thereby exposing them to stranded assets,” comments Lucie Pinson, founder and director of Reclaim Finance.
Engie has already made clear that it wishes to convert its inactive coal plant in Italy into gas. This underlines the fact that Engie might well choose to convert its plant in Portugal into gas, even as the European Union boasts of its exemplary climate credentials.
Engie has also suggested that it could sell some plants. While this might allow it to decarbonize its portfolio, this wouldn’t entail actual CO2e emission reductions in the real world. Engie has already sold 14 coal plants representing 54% of its capacity (11,356 MW) since COP21.
Lorette Philippot, campaigner at Friends of the Earth France, adds: “Behind the gloss of this announcement, Engie is barely bothering to hide the lack of ambition in its coal exit strategy. After flogging off its fleet of coal plants in Asia and Europe, it has let it be known that it might do the same for its 10 remaining plants. But this false solution would be a veritable disavowal of its social and environmental responsibility: it would leave the face of these ultra-polluting assets, as well as the employees of these sites, in the hands of unethical companies intent on gambling on coal in 2021.”
Finally, Engie speaks of carbon neutrality in its strategy, but to reach carbon neutrality by 2050 an alignment with 1.5°C is necessary. Engie’s strategy, however, currently involves a 2°C objective certified by the SBTi, which is blatantly insufficient to reach carbon neutrality (3).